Don’t Zzz on Generation Z this Holiday Season

As digital connectivity soars, generational shifts come to play a bigger role in setting shopping behaviors than socioeconomic differences do. It is believed that generations are shaped by the context in which they emerged so it is only fair to expect that a generation that grew up entirely in the digital era will be the one to shape the online world the most. Yes, we are referring to Gen Z, the generation which was born between 1997-2012. This generation has been on every brand’s radar not only because they are tech-savvy and mobile-first, but because they display a notable convergence in generational mindset specifically when it comes to consumerism and their expectations of brands.

In order to unveil the eCommerce spending trends behind this BFCM and help retailers understand this year’s holiday-shopping landscape from different generational and demographical perspectives, Klaviyo surveyed 3500 shoppers in North America regarding their spending intentions this season. One particular area of interest to Avex was how Gen Z will shop for the Holiday Season. 

How will Gen Z Shop this Holiday Season? 

How much are Gen Zers planning to spend? 

Considering the age range of Gen Z and that they are probably just starting their careers, it might be empirical to assume that their spending will be less than that of other generations. Though 18% of Gen Z only spends $100-249 on holiday gifts each year, 51% of them spend between $250-999 which puts them at par with other generations. 

What might hit retailers and brands as a surprise is that more Gen Zs than any other generation (31%, compared to only 6% of boomers, 9% of Gen X, and 21% of millennials) plan to increase their holiday shopping spending this year. 59% plan to spend the same, and only 10% plan to spend less.

Of the 31% of Gen Z that are planning to increase their holiday spend, 31% plan to spend $200-249 more and 17% to spend $1K+ more. On the other hand, of the 10% Gen Zs who plan on reducing their holiday spending, 43% will spend only  $50-199 less. The proportional change is lower than the most common choice of the other generations.

How will inflation affect Gen Zer's Shopping decisions? 

It is understandable that the youngest generation in the workforce is the most concerned about their economic well-being. More Gen Zers than any other generation (25% vs. 20% of boomers, 19% of Gen Xers, and 20% of millennials) say inflation will affect their future spending decisions.

Where is Gen Z planning to shop? 

15% of Gen Z plan to do all their holiday shopping online and that’s a significant percentage compared to other generations (12% of millennials, 10% of boomers, and 9% of Gen X). However, that doesn’t mean that won’t shop offline; 45% of the surveyed Gen Z plan to split their holiday shopping 50/50 between online and in-person.

Gen Z BFCM Shopping Statistics Speak Opportunity for Retailers

Klaviyo’s Survey on Holiday Spending clearly portrays that Gen Zers possess two of the three main elements needed to convert this generational segment this holiday season; spending power and purchase intent. You are now probably wondering what the third one is and we won’t hold the answer any longer; brand and product appeal. A  brand must heavily invest in understanding its different target segments in order to cater to their needs, shopping motives, and expectations. 

How is Gen Z different from other generations? 

• Gen Zers are hungry for authenticity: They look at brands beyond labels and product arrays - The mission, the purpose, the story, the experience, the communication and the ethical responsibility are all factored in their purchase decision. 

• Gen Zers value uniqueness to exclusivity: They don’t want to be labeled in a certain way or belong to a certain group for purchasing a certain brand, they want to stand out with items that reflect their personality and express their values.

• Gen Zers care about experiences: For them, shopping is not just a transaction; it’s an experience that enriches their everyday lives.

• Gen Zers are in constant search of information: Growing up in the age internet and social media networks gave rise to a hypercognitive generation very comfortable with gathering and cross-referencing several sources of information and integrating online and offline experiences before committing to a purchase. 

What marketing strategies should merchants implement to connect with Gen Z? 

In order to connect with Gen Z, a brand must be as digital, value-conscious and authentic as they are! And though the following marketing tactics will help merchants meet their Gen Z this Holiday sale season, they should be implemented as part of the brand’s overall marketing strategy.

• Communicate your brand values effectively and frequently. Gen Zers are more inclined to shop from a brand that aligns with and reflects their own values. To ensure long-term resonance with Gen Z, a brand’s BFCM marketing campaigns should revolve around the values they care most about whether it's diversity, sustainability, self-expression, inclusivity, and/or activism. 

• Build trust by being authentic. Gen Zers tend to gravitate toward brands that have proven to be trustworthy. Brands are advised to maintain a direct communication line, build community, and generate engagement through the channels that resonate best with this demographic, specifically social media, email, and SMS. 

• Use a mobile-first approach: Gen Zers crave user journeys that are cohesive and consistent across every touch point. Since this generation primarily uses their mobile devices to shop, make payments and stay connected, it is only sensical that merchants meet them where they are with the on-brand experience they expect.

• Be loud and proud in your communication: In today’s crowded online space, Gen Z appreciates a brand that stands out from the crowd with bright color palettes, a bold tone of voice, and powerful visuals. Any of the brand’s online touch points including its eCommerce storefront, social media accounts, and retention marketing campaigns should display the brand personality at heart. 

• Choose entertaining over selling. With the rise of shoppable social media, gamification of messaging, and video reel, brands are equipped with numerous channels to entertain the easily distracted generation. 

• Build a community: Establishing a digital community is integral to developing a successful Gen Z-focused marketing strategy.  Brands can help facilitate authentic connection and conversation beyond collaborating with macro-influencers and publishing ads. Leveraging rising content creators who share the same values, doubling up on BFCM loyalty program points, and frequently sharing user-generated content all play a significant role in setting the foundation for building a loyal Gen Z fan base and retaining them post BFCM. 

• Personalize your communication: Of all the generalizations made about Gen Z and their preferences, no two persons are ever identical, so extending authentic, personalized experiences to each consumer is essential for brands that are wishing to convert Gen Zers.

• Reach your audience through next-level omnichannel marketing: With the abundance of consumer insights and the convergence of the online and offline worlds, a brand should meet Gen Zers' readiness for consumption across every channel. 

To sum it up, brands are less likely to convert Gen Z with one-time BFCM marketing campaigns; a brand should display a yearlong engaging marketing strategy. Having said that, BFCM communication should be a continuation of the brand’s expression of value and display of identity, all while leveraging the brand’s community and communicating promotional offerings in a personalized manner.

Well before the rise of “influencers”, younger generations have always had the biggest influence on shaping industry trends and consumer behaviors. Gen Z is no different. As they embark on their career journey and take an active role in today’s economy, the first generation of true digital natives is starting to have more influence on brand decisions. While this results in new opportunities emerging for merchants, it is undoubtedly challenging.  Businesses must recalculate how they deliver value to the consumer, weigh mass production against personalization, and practice what they preach when it comes to marketing.

Avex is a Klaviyo Retention Marketing Agency that leverages the power of the platform to increase email marketing revenue, retention, and customer lifetime value for high-growth brands including Enjoy Life Foods, Talia D’Napoli, Brandon Blackwood, and Tuft & Needle, to name a few. From email setup and implementation to campaign management and flow optimization, we craft engaging email campaigns that are tailored to your target audience generation all while bearing in mind their shopping behaviors and preferences.